Downfall of the World's Premier Real Estate Development Company

CityScape – The Circus Comes to Town | September 20, 2009

The WSJ is reporting that Emaar and Nakheel have reconsidered their decision to pull out of CityScape.

I, for one, am glad that attendees this year will not have to miss out on the freakshow for the first time since the inception of CityScape.  What horrible wonders will these developers have in stall for audiences this year?  What will top the financial/architectural nightmare inducing Nakheel 1Km tower?  Will Emaar bounce back with the world’s largest Date Souk?

We, or at least I, can joke about this all day long, but there is a much darker side to this story.

Pulling out of CityScape was a financially sound decision since convention budgets for one company can easily run into the millions, investors aren’t looking to hear about new projects from company’s with a gargantuan balance sheet of overvalued assets, and finally, not attending sends the signal that the company is focused on restructuring and strategy for the way forward.

Unfortunately, as what seems to be often the case, what’s good for investors in Dubai is not good for Dubai Inc (aka the Dubai Municipality).  Maybe, one year ago, Emaar would have had the independent power to resist pressure to avoid wasting time and money on Dubai’s premier circus, but, as the public company will be consolidating their holding with government owned entities, Emaar is more a less a meager PR tool to manage the rapidly declining wealth of an irresponsible ruling body.

Bottom line, Emaar is a shell of a company.  Anything or anyone that brought Emaar to greatness (which wasn’t much), is no longer a part of the company.

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